European Factors to Watch-Higher start eyed, Thyssen to rally

LONDON Tue May 13, 2014 2:44am EDT

LONDON May 13 (Reuters) - European shares were set to rise at the open on Tuesday, with key regional indexes on track to test recent peaks, as a rally in U.S. shares and upbeat updates from blue-chips such as steelmaker ThyssenKrupp supported risk appetite.

At 0637 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were up 0.3-0.4 percent.

The Dow and the S&P 500 closed at record highs on Monday and the Nasdaq rallied as shares of Internet and biotech companies advanced. Asian shares also rose, led by Indian equities on hopes of an election victory for the business-friendly opposition party.

Germany's ThyssenKrupp raised its full-year earnings outlook on Tuesday, while aerospace group Airbus Group posted a narrower-than-expected drop in core earnings and reaffirmed its financial goals for the year.

ThyssenKrupp's shares were indicated to open 3.2 percent higher.

Renewed signs of brisk mergers-and-acquisitions activity may also provide some support. U.S. drugmaker Pfizer kept up the pressure on bid target AstraZeneca on Tuesday, saying its offer represented compelling value for a company which would otherwise face challenges as a standalone firm.

Pfizer is planning to return with a higher bid for AstraZeneca before the U.S. drugmaker considers going hostile, Bloomberg reported late on Monday, citing people familiar with the matter.

Investors were set to focus on the ZEW monthly poll of German investor and analyst sentiment, due at 0900 GMT and expected to show a slight improvement in current conditions and a slight deterioration in sentiment. U.S. retail sales at 1230 GMT may also affect market direction later in the session.

The CAC was 0.3 percent away from an all-time high of 4,507, which it hit last week, while the FTSE was just 0.2 percent off its high for the year at 6,867. The Dax's all-time high, set in January, was nearly 1 percent above current levels.

"The FTSE looks set to test the year's double-top at 6,867 and the all-time high print from 1999 (at 6,950) will be the market's next target," Chris Weston, chief market strategist at IG, wrote in a trading note.

"The CAC and DAX also look like testing all-time highs and could require a bit of a nudge after the open and perhaps that comes in the shape of a strong U.S. retails sales report or German ZEW survey."

Comments by Bundesbank chief Jens Weidmann, due to speak later on Tuesday, may also affect sentiment as the market speculated about fresh stimulus from the European Central Bank at its June meeting.

"(It) seems that the mix of low volatility, easing central bank policy and an improving trend in developed market growth has seen traders look at equities as the asset class of choice," Weston said.

The pan-European FTSEurofirst 300 rose 0.7 percent to 1,364.48 on Monday, having hit a high of 1,365.26, not seen since May 2008, earlier in the session.

Europe bourses in 2014: (link.reuters.com/pad95v)

Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ > Asia sidesteps Ukraine woes, vote hopes spur Indian stocks > Dow, S&P 500 end at record highs; DirecTV up late > US STOCKS-Dow, S&P 500 end at record highs; DirecTV up late > TREASURIES-Prices fall before retail sales, inflation data > Euro stabilises for now but seen shackled by ECB prospects > Gold steady on Ukraine but fund outflows threaten gains > Shanghai copper up 2 pct; nickel hits new 27-month peak > Brent firms above $108 on Ukraine tensions

COMPANY NEWS

E.ON

Indicated unchanged

Germany's biggest utility said its core earnings fell 12 percent in the first three months of the year, blaming a mild winter in Europe and weak wholesale prices that have made its gas-fired power stations unprofitable.

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DEUTSCHE TELEKOM

Indicated 0.1 percent higher

CEO Tim Hoettges said in an interview with Handelsblatt that Europe's telecoms need to be allowed to operate on a level playing field with rivals such as Google.

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FRESENIUS, FRESENIUS MEDICAL CARE

Fresenius indicated 0.3 percent higher

FMC indicated 0.2 percent higher

Q1 IFRS report due. Results already released on May 6.

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THYSSENKRUPP

Indicated 3.2 percent higher

Fiscal Q2 results due. The steelmaker's adjusted EBIT is seen rising 51 percent to 296 million euros. Poll:

FRAPORT

Indicated 0.4 percent higher

Full April traffic figures due at 0500 GMT. The airport operator said last week that passenger numbers at Frankfurt airport rose 0.8 percent in April.

AIRBUS GROUP

The aerospace group posted a narrower-than-expected 5 percent drop in core earnings, despite lower aircraft deliveries and higher research and development spending, and reaffirmed its financial goals for the year.

SOCIETE GENERALE

France's second-largest bank said it is aiming for 3 percent annual revenue growth over the next three years, helped by retail banking in Eastern Europe, Russia and Africa.

CREDIT SUISSE

New York state's banking regulator is seeking hundreds of millions of dollars from Credit Suisse in its probe of potential tax evasion involving the Swiss bank, according to sources close to the matter, which could push an eventual settlement with U.S. authorities over $2 billion.

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SWISS LIFE

Swiss Life, Switzerland's biggest dedicated life insurer, said on Tuesday premium income fell by 1 percent in the first three months of 2014, with its division managing wealthy people's money declining by more than 40 percent.

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VEOLIA

French transport firm Transdev, 50 percent owned by water and waste group Veolia Environnement, said the board of its SNCM Corsica ferry unit had not renewed the mandate of its chief executive and would appoint a replacement soon.

BOUYGUES

Labour representatives at Bouygues Telecom expect the company to increase the number of potential job cuts to as many as 2,000 in a cost-saving plan, a trade union official said.

France's economy minister urged Bouygues Telecom to explore a tie-up with other operators after it lost out in a battle for control of SFR to rival operator Numericable.

RENAULT

The carmaker said Nissan Motor Co contributed 415 million euros to its net income in the first quarter of 2014.

EIFFAGE

The French construction and concessions company confirmed its full-year sales target after first-quarter revenue rose 4.5 percent, supported by a rebound in construction activity across Europe.

GDF SUEZ

The power group priced its dual tranche deal, having placed 1.2 billion euros of bonds maturing in 2020 and 1.3 billion euros of bonds maturing in 2026.

(Reporting By Francesco Canepa; Editing by Prateek Chatterjee and Lionel Laurent)

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